The North Sea Fiscal Environment - How Governments Incentivize Investment in a Maturing Basin

Saad, Agha

OnePetro 

Abstract

There is little commonality of fiscal incentives in the oil and gas sector. This is demonstrated in the North Sea, where rapidly changing market fundamentals had led to a range of fiscal measures aiming to incentivize the sector. Until very recently, rising cost of development against the backdrop of a maturing basin made the North Sea a less attractive place to invest in. Renewed interest in the North Sea seen in the last 5 years has been a direct result of the UK and Norwegian governments engaging with the stakeholders and introducing new policies which have the right incentives to extend basin life. However, in the UKCS, some would argue that these changes have come too late and investment and production levels have been already damaged. A brief review of the challenges in each country, the impact of fiscal incentives and to what extent they have been successful will form the main part of this paper.